Huntsman's Q4 2024 Earnings Call: Contradictions in Strategy, Market Conditions, and Margin Expectations

These are the key contradictions discussed in Huntsman's latest 2024Q4 earnings call, specifically including: Restructuring in Downstream, Strategic Decisions on Maleic Business, Maleic Announcement and Strategy, MDI Market Conditions, Performance Products' Margin Expectations and Demand Outlook, and the Impact of Tariffs on Trade Flows:



Market Conditions and Restructuring Actions:
- Huntsman reported a focus on cost minimization and asset footprint optimization, with announced closures and relocations across the globe, including offices in the UK, Brazil, Argentina, and Chile.
- The company has reduced headcounts in Basel, Brussels, and The Woodlands, with efforts to realign business services hubs in San José, Costa Rica, and Kraków, Poland.
- These measures are in response to over $150 million in global inflationary costs offset since 2022 and a 6% decrease in SG&A expenses.

MDI and Pricing Trends:
- Huntsman has observed publication prices for polymeric MDI in China at a three-year high, with signs of early recovery in pricing and margins.
- The company has announced several price increases in North America, with multiple players actively pursuing price increases across different segments.
- The pricing actions are encouraged by the end of de-inventorying and gradual recovery in demand, with expectations for more positive movement in the MDI industry.

European Market Dynamics:
- Volumes in Europe have been subdued due to an electrical outage at Huntsman's Rotterdam facility, impacting comparison with the previous year.
- A 40-day maintenance turnaround is planned, involving several raw material suppliers and downstream customers in the Rotterdam area.
- The company acknowledges that Europe is dealing with high-energy costs and industrial de-industrialization, with plans to move energy-intensive businesses to cheaper locations.

Tariffs and Trade Flows:
- Huntsman has noticed recent tariffs on imports into the U.S., particularly impacting maleic anhydride and MDI, which could lead to margin pressures and price increases.
- The company expects to see more actions in anticipation of tariffs, affecting supply chain costs and potentially driving future pricing actions.
- Huntsman's diverse global footprint and production within regional markets may serve as an advantage in navigating these trade changes.